A situation that occurs when short-sellers, trapped in a rising market, begin to buy their way out of their losing positions, fueling upward pricemomentum and further panic-buying for the short-sellers still in the market. professional traders will sometimes try to take advantage of a short squeeze by buying into the upward price pressure and selling short when the momentum begins to weaken. They will then ride the price back to a correction point, take profits, and re-enter the market as buyers. Compare to bull squeeze.